Staff recruitment pays off for Data#3

Data#3 has recorded a substantial growth in revenue, gross earnings and net profits

ASX-listed integrator, Data#3 (ASX:DTL), has met its full-year guidance figures and reported a 28 per cent increase in revenue to a record $363.7 million.

The Queensland-based company experienced a 22 per cent jump in gross earnings to $12.1 million, along with a 26 per cent year-on-year rise in net profits to $9.1 million.

Software licensing proved a highlight, chalking up 46 per cent year-on-year growth, while total software revenue rose 40 per cent over the same period. Earlier this year Data#3 picked up 48 ex-Commander staff including key Microsoft software licensing personnel in Perth and Melbourne. Data#3 now has 60 dedicated people on its software licensing team nationally.

Overall, Data#3 recruited 110 new people during the year, bringing its total headcount to 460.

“We had a plan to break even and spend $3 million of our gross profits [on recruiting ex-Commander staff] in the second half of the year,” Data#3 managing director, John Grant, said. “We had a contingency in case we didn’t cover that cost in the last four months but we ended up breaking even.”

Grant said growing mid-market sales had helped improve gross margins on software and predicted the segment would continue to present broader opportunities over the next 12 months.

On the other side of the fence, infrastructure solution sales, including datacentre and desktop products, grew by 18 per cent year.

“Our product solutions business grew well, but could have done more through the Queensland Government PC contract,” Grant said. “We were awarded that last September but it took six or seven months to ramp it up and get those agencies into gear.”

Data#3’s enterprise products business however had a “fantastic year” off the back of increasing virtualisation and consolidation work, Grant said.

“We did some enormous implementations around these areas,” he said.

Data#3’s recruitment business grew 17 per cent, aided by its acquisition of Fingerprint Consulting Services in March.

Grant pointed out Data#3’s total services revenue grew by 16 per cent year-on-year to around $40 million.

“Going forward we see a significant opportunity in the managed services area,” he said. “We have now put all our managed services under the one umbrella, whereas previously we had these separated across our three divisions. We have been successful in increasing our Queensland managed services footprint and are now looking to drive this nationally.”

Grant predicted a tough economic market for the next 12 months but expected all parts of the company's business to be solid.

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